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Stellantis mega-merger gets approval from FCA, PSA shareholders

MILAN — Shareholders of Fiat Chrysler and PSA Peugeot decisively voted Monday to merge the U.S.-Italian and French carmakers to create worldÂ’s 4th-largest auto company. Addressing separate meetings, both PSA Peugeot CEO Carlos Tavares and Fiat Chrysler Chairman John Elkann spoke of the “historic” importance of the vote, which combines legacy car companies that helped write the industrial histories of the United States, France and Italy. Before the merger is finalized, shares in the new company, to be called Stellantis, must the launched. It will be traded in Milan, New York and Paris. The marriage of PSA Peugeot and Fiat Chrysler Automobiles is built on the promise of cost-savings in the capital-hungry industry, but what remains to be seen is if it will be able to preserve jobs and heritage brands in a global market still suffering from the pandemic. The deal will create the worldÂ’s fourth-largest carmaker, with the capacity to produce 8.7 million cars a year, behind Volkswagen, Toyota and Renault-Nissan, and create 5 billion euros in annual synergies.  “We are fully aware of the fact that together we will be stronger than individually,'' PSA CEO Carlos Tavares told a virtual gathering of eligible shareholders. “The two companies are in good health. These two companies have strong positions in their markets.” The new company will put together under one roof French mass-market carmakers Peugeot and Citroen, top-selling Jeep and Italian luxury and sports brands Maserati and Alfa Romeo - pooling companies that have helped define the industry in the United States, France and Italy. While the tie-up is billed as a merger of equals, the power advantage goes to PSA, with Tavares running Stellantis and holding the tie-breaking vote on the 11-seat board. Tavares is set to take full control of the company early this year, possibly by the end of January. Fiat Chrysler chairman John Elkann, heir to the Fiat-founding Agnelli family and Fiat ChryslerÂ’s biggest shareholder, will be the Stellantis chairman. Fiat Chrysler CEO Mike Manley will head North American operations, which is key to Tavares' long-time goal of getting a U.S. foothold for the French carmaker he has run since 2014, and the clear money-maker for Fiat Chrysler. Such a deal was long wanted by Fiat ChryslerÂ’s long-time CEO Sergio Marchionne, who had predicted the necessity of consolidation in the industry. He was unable to find a deal before his sudden death in July 2018.

Vans aren't glamorous, but they're key to EU blessing FCA-PSA merger

MILAN/PARIS — Their silhouettes don't stir dreams of adventure like a sports car or trendy SUV, but vans are a rare source of profit for European carmakers, which is why EU regulators are focused on them as they decide whether to back an industry mega-merger. European competition regulators are worried that Fiat Chrysler and Peugeot maker PSA's proposed merger may harm competition in small vans. With a total of 755,000 vans sold last year in Europe, the combined Fiat Chrysler (FCA) and PSA would get a market share of around 34%, based on industry data, more than double that of Renault and Ford, with shares around 16% each. Volkswagen and Daimler follow with market shares of 12% and 10% respectively. "Commercial vans are important for individuals, SMEs and large companies when it comes to delivering goods or providing services to customers," European Union competition chief Margrethe Vestager said in a statement, announcing an in-depth investigation into the proposed merger. "They are a growing market and increasingly important in a digital economy where private consumers rely more than ever on delivery services." Dario Duse, a managing director at consultancy firm AlixPartners, said demand for vans was not based on people's disposable income, as for cars, but rather on GDP and industrial trends, and in particular the logistics industry, where big players such as Amazon or DHL operate. "Logistics is a business segment which is having a significant growth, for several reasons including e-commerce, where you need efficient and agile vans for interurban and city deliveries," he said. "LCVs (light commercial vehicles) may recover faster than passengers cars in the post-COVID-19 phase." Sales of vans up to 3.5 tonnes in Europe amounted to 2.2 millions vehicles last year, compared to 15.8 million for passenger cars, according to data provided by the European Auto Industry Association (ACEA). The light commercial vehicles (LCVs) market may be secondary in terms of volumes, but it remains highly profitable in an industry where margins are constantly under pressure. Margins are generally higher than on passenger cars, up to 5-10 additional percentage points, AlixPartners says. "With LCVs you don't have to fulfill a series of consumer expectations that drive additional complexity and costs, such as for interiors. LCV customers are more rational and business driven," Duse said. And while electrification in heavy trucks is complicated, it might come sooner for LCVs.

Minivans could be key to Google-FCA self-driving partnership

Executives from Google and Fiat Chrysler Automobiles have held discussions about creating a technical partnership, the purpose of which would be to further development of self-driving vehicles, according to multiple reports. The two companies might make ideal partners. Google has been at the forefront of developing autonomous technology, and has publicly stated it'd seek partners to build vehicles. FCA, meanwhile, has not invested in self-driving research, and its CEO has been publicly offering the company up for acquisition for the last several years. Combined, they could make both the brains and the bodies of self-driving cars. "Public transit executives could be buying autonomous minivans rather than expensive buses." – Chris Urmson "A Google-FCA tie-up could simultaneously put both companies in the lead in this critical race," said Kelley Blue Book senior analyst Karl Brauer. "... FCA's efforts to merge with another automaker have failed, but if the automaker can join forces with Google, it could immediately change the dynamic. Every car company is trying to get into the tech space right now, because they all know their future depends on it." A Google spokesperson declined comment on the reports Thursday, and FCA did not return a request for comment. But Chris Urmson, director of Google's self-driving car project, may have inadvertently hinted at the partnership Wednesday when he detailed an interest in building autonomous minivans for public-transportation use. "Public transit executives could be buying autonomous minivans rather than expensive buses," Urmson said during a public meeting on autonomous regulations held by the National Highway Traffic Safety Administration in Palo Alto, California. "Federal standards determine what kinds of vehicles cities can use for transit. This needs attention." Minivans are different than the Lexus 450h and pod-like prototypes Google has used for autonomous testing so far. If Urmson is indeed interested in self-driving minivans that provide on-demand services for public transportation users, as he elaborated upon, there may be no more perfect partner than Chrysler, which pioneered the minivan segment three decades ago and recently reasserted its presence the minivan market with the new Pacifica, a completely redesigned vehicle. Ridding the urban environment of traffic-clogging buses might be one small slice of Google's broader plan for transforming cities and the imprint cars make upon them.